Admission of New Partner MCQs

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Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 26, 2023

This set of multiple choice questions (MCQs) focuses on the admission of a new partner. You can use this quiz to help prepare for your exams, interviews, and other assessments.

To begin, click the "Start quiz" button. If you find any questions challenging, check out our article on the admission of a new partner to learn everything you need to know.

1. If an incoming partner purchases shares from an old partner, it:
2. Total proprietorship of the business is increased:
3. In a firm, John's capital is $40,000 and Harry's is $60,000. Michael purchases John's interest for $50,000. What is the amount of goodwill paid to John?
4. A & B are partners in a firm with capital of $100,000 and $150,000, respectively. C purchased half the interest of A for $120,000. The amount credited to C's capital will be:
5. Goodwill is valued at two years purchased of the average profits of three previous years which are $15,000 the value of goodwill be:
6. The value of goodwill is agreed at $30,000. C, an incoming partner, purchases 1/4th of the share of total profit. Goodwill will be raised in the book at the value of:
7. An incoming partner pays their share of goodwill in cash, and the profit sharing ratio of the old partners is changed. Goodwill will be distributed among the old partners:
8. At the time of admission of a new partner, the firm is:
9. At the time of admission, how does an incoming partner contribute goodwill?

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Admission of New Partner MCQs FAQs

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.